How big a flat should I get?

(Part of “The Almost Complete Goondu’s Guide to Buying a HDB Flat in Singapore” series.)

Let’s say your budget allows you to get a 5 room flat not so near town. The question to consider next is, do you really need a 5 room flat? Sure it’s nice to have, but a house that you plan to live in is ultimately a liability. A bigger house means larger property taxes, higher utility bills, more money spent on renovations, and more furniture needed to furnish the extra rooms. Also, you get less ‘ang pows’ from the government from programs like GST offset packages.

A 4 room flat has the same number of rooms as a 5 room flat. If this is your first flat purchase, perhaps you should consider not over-stretching your budget. This would allow you to save more for retirement, or more money towards investments in another property or otherwise.

Do note that if your household income is $8k or less, and would probably never exceed $8k, you get get a 2nd HDB loan if you upgrade from a smaller flat to a bigger flat in future. However, you’ll have to take up a bank loan if you choose to downgrade from a big flat to a small flat, even if your household income is still $8k or less.

Consider renting out your spare rooms for the first few years to help pay for your mortgage. An average room rents out for about $500-$600/mth, inclusive of utilities. As new additions to your family come, you can then solely cease to have tenants in your home.

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